Question

Alset Auto Manufacturer thinks there are high inventory costs

associated with the core subassemblies. Is this true? If yes, what
can you do to reduce them? If not, explain why?

Answer 1

Yes, there can be high inventory costs associated with core subassemblies in the auto manufacturing industry. To reduce these costs, Alset Auto Manufacturer can focus on improving supply chain coordination, implementing efficient production techniques, and maintaining positive relationships with suppliers.

Step-by-step explanation:

Yes, there can be high inventory costs associated with core subassemblies in the auto manufacturing industry. In the 1980s, car manufacturers adopted a business innovation called just-in-time delivery, which involved eliminating most warehousing jobs by having parts delivered daily for assembly. However, this reliance on just-in-time delivery creates a risk of disruptions in the supply chain if there is a strike or a problem with a supplier. To reduce inventory costs, Alset Auto Manufacturer can focus on improving supply chain coordination, implementing efficient production techniques, and maintaining positive relationships with suppliers.